European stocks subdued as U.S. jobs cheer fades

Updated on: May 6, 2013 / 8:40 AM
/ AP

MILAN European stocks edged lower on Monday as the momentum from an unexpectedly strong U.S. jobs report last week faded.

While Asian stocks enjoyed a bounce and Wall Street was set for a higher opening, European stocks showed little resilience and pulled back from highs set on Friday, when the U.S. Labor Department said employers added 165,000 workers in April. The figure was above forecast and hiring in February and March was also stronger than previously estimated. The unemployment rate fell to 7.5 percent, the lowest level in four years.

After enjoying gains last week, investors in Europe focused once again on the huge economic problems facing the 17-country eurozone. Unemployment has been hitting a series of record highs and governments don't have the money to spend on new growth programs.

By midday in Europe, Germany's DAX was 0.1 percent lower at 8,116.10 after hitting a record high on Friday. France's CAC-40 was down 0.3 percent at 3,902.95. London trading was closed for a bank holiday.

Wall Street appeared headed for more gains, with Dow futures rising 0.2 percent to 14,924. The broader S&P 500 futures rose almost 0.1 percent to 1,609.

Friday's job report counterbalanced weeks of mixed signals about manufacturing and corporate earnings and renewed hopes of a recovery in the world's largest economy.

"Markets just came back to life, helped by that strong reading from U.S. nonfarm payrolls. That number completely obliterated expectations," said Stan Shamu, market strategist at IG in Melbourne.

In Asia, Malaysia's KLSE Composite surged 3.4 percent to 1,752.02 after the country's governing coalition won national elections, albeit with a weakened majority, to extend its unbroken, 56-year rule.

Hong Kong's Hang Seng rose 1 percent to 22,915.09. Australia's S&P/ASX advanced 0.5 percent to 5,156.20. Benchmarks in Singapore, Taiwan and Indonesia also rose, while the Philippines fell. South Korea's Kospi lost 0.2 percent to 1,962.25. Japan's stock market was closed for a public holiday.

Benchmark oil for June delivery was up 65 cents to $96.26 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.62 to close at $95.61 a barrel on the Nymex on Friday.

In currencies, the euro fell to $1.3103 from $1.3110 late Friday in New York. The dollar rose to 99.22 yen from 99.04 yen.